The problem is this (basically an accounting error) :
The city is demanding that the veterans repay their gross salaries, even though they never saw about a third of the money, which went for taxes and other deductions.
There's no other way to do it properly, since gross pay is the "bottom line" number in all official aspects. And the income tax may be refunded anyway if a reservist has to write a check to his employer for it. If you pay $10,000 in taxes on $50,000 in income and then have to write a check for $50,000 to reimburse your employer, I suspect the entire $50,000 would be fully deductible on next year's return anyway.